#PABudget: Don’t Weep for the Beer Distributors

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This plan to create multiple different kinds of licenses for selling beer is dumb and probably not going to pass, but this is one of my favorite issues so let’s do a blog post about it anyway.

The legislation at play, being debated in the Senate, would open up several types of stores for licenses to sell specific amounts of beer and wine, based on the size of your store, and the license you purchase and renew.

Right now, of course, Pennsylvanians can only buy liquor and wine in state-run stores. They can buy their beer in bulk at distributors. They can buy six-packs at grocery stores and corner stores that have special restaurant licenses.

The new bill would create licenses for grocery stores of various sizes, a separate license for big box stores to sell cases of beer, and a license for pharmacies to sell six-packs of beer.

I’d be excited to buy beer in all these different places, but the goal here seems to be to dull the competition between these different kinds of sellers, and dulling competition has no place in this bill. The whole point of reforming the alcohol market is that we want to promote competition. That’s why people shouldn’t get hung up worrying whether this is bad for beer distributors.

Sure, beer distributors are going to say this will destroy their industry, but they’re lying. Beer distributors exist in states with private alcohol sales. I promise – I lived in NYC for years and I saw them with my own eyes. I even bought kegs and cases of beer from them, because that’s what beer distributors are for.

Even if grocery stores sell six-packs and cases of all the “domestic” swill brands and all the most popular craft beers, there’s only so much space on the shelves at the grocery store. If you want a case of Bell’s Two-Hearted Ale, you need to go to the beer distributor, because the supermarket’s not going to carry that. Or if you want a keg of Troegs Nugget Nectar for your backyard barbecue, you’re gonna have to go to the beer distributor for that too.

Now, does that mean no beer distributors are going to go out of business because of new competition? No. And does it mean they’re going to be making the same profit margins they are now? Definitely not. But who cares? You didn’t get elected to run the state for the beer distributors, you got elected to run the state for the good beer-drinking people of Pennsylvania.

The privatization bill was simply a smoke screen to let convienence stores and drug stores the ability to sell beer. No way was that going get past the union. However, what has happened on the heels of the privatization bill is the grocery stores, convienence stores and drug store lobbiests saw an opertunity to throw beer into the forefront, leaving spirits alone.
Should PA create new licenses? Absolutely not! Beer distributors and taverns have set up there business by the rules since prohibition. Not only will creating new licenses to sell beer put a knife in the heart of our business, our license we worked so hard for will have minimal value. These huge corporations that want to sell beer in our state should buy an existing license. There are plenty out there.